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Coffee quality improving profitability andrew hetzel cafemakers, llc hawaii, usa.

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Presentation on theme: "Coffee quality improving profitability andrew hetzel cafemakers, llc hawaii, usa."— Presentation transcript:

1 coffee quality improving profitability andrew hetzel cafemakers, llc hawaii, usa

2 restaurants that continue to serve coffee as an afterthought are trying to play catch up, even as economic forecasters predict a continued financial pinch for the country in general jan 03 qsr magazine

3 benefit national retailers upgrading qualitynational retailers upgrading quality motivationmotivation –profit –customer retention –strengthen brand

4 dunkin the competition 63% sales63% sales krispy kreme in financial crisiskrispy kreme in financial crisis espresso beverage platformenormously successfulespresso beverage platformenormously successful

5 re-ten-shun chik-fil-a upgrades coffee programchik-fil-a upgrades coffee program drive-thru operators notice competitors coffee in customer vehiclesdrive-thru operators notice competitors coffee in customer vehicles 45% price increase45% price increase coffee sales doublecoffee sales double

6 if customers were willing to make two stops in the morning to get an exceptional cup of coffee, there was a big opportunity to create value for them by upgrading our offerings mike falkenberry chik-fil-a

7 case study: borders cafe pioneer (early 80s)pioneer (early 80s) 1400 sq ft1400 sq ft enhance buying experienceenhance buying experience august 2004 began upgradesaugust 2004 began upgrades

8 textbook example 465 cafes465 cafes 70% upgraded by % upgraded by 2007 metricsmetrics –% of business –same store sales –growth of category

9 cafe and gift and stationery categories positively impacted comparable store sales in remodeled stores, resulting primarily from the conversions of cafes to the seattles best coffee brand borders group

10 café unbound menu changesmenu changes –coffee focus –reduced merchandise –streamlined food fixturesfixtures equipmentequipment

11 café unbound brandbrand ingredientsingredients store placementstore placement emphasis as independent businessemphasis as independent business retained employeesretained employees

12 by the book $7 million (superstore)$7 million (superstore) $150k conversion estimate$150k conversion estimate $400k sales estimate$400k sales estimate


14 mcdonalds july 2006 same store sales increase: us 1.9%, europe 5%, asia 5.4% ceo jim skinner credits breakfast and premium-roast coffee. mcdonalds

15 mccafe increase breakfast salesincrease breakfast sales npd research:npd research: –37% breakfast orders include coffee –coffee is #1 breakfast food item

16 mccafe 1000 world-wide1000 world-wide australia, nz, germany, us (test)australia, nz, germany, us (test) rebuilding brandrebuilding brand –broadening demographics –lounge atmosphere

17 mccafe germany extremely successfulextremely successful –milk sales rising with coffee consumption –italian / american-style 200 locations; 500 projected200 locations; 500 projected shop-in-shop conceptshop-in-shop concept good buy-in with franchiseesgood buy-in with franchisees


19 not clowning around US$1.5 mil avg store 31%US$1.5 mil avg store 31% 10-11% sales increase at mccafe locations10-11% sales increase at mccafe locations 50%

20 good cents additional salesadditional sales customer retentioncustomer retention brand enhancementbrand enhancement increased profitabilityincreased profitability

21 questions, copies or help andrew hetzel cafemakers, llc hawaii, usa +1 (808)

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